2013/02: Should a tax be placed on soft drinks and other sweetened beverages?

What they said...'People are ... consuming much larger amounts of soft drinks than they were five years ago'
Craig Sinclair, Cancer Council Australia public health chair

'Focusing on a single source of kilojoules in the diet hasn't worked in the past and ignores the concept of the total diet'
Geoff Parker, chief executive of the Australian Beverages Council

The issue at a glance
On January 17, 2012, the Cancer Council, Diabetes Australia and the National Heart Foundation of Australia called on the Australian government to set up an inquiry into taxing soft drinks and to place restrictions on the marketing and selling of beverages.
The groups warned that a failure to act now will contribute to a growing public health crisis.
The Australian Beverages Council, representing Australian soft drink manufacturers, has reacted negatively to the proposals, claiming that taxing soft drinks would be misguided and that the industry has already placed voluntary restrictions on its selling practices.

A soft drink tax or soda tax is a tax or surcharge on soft drinks. It may focus on sugar-sweetened beverages (soft drink sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncarbonated drinks, and sports and energy drinks). It may aim to discourage unhealthy diets and offset the economic costs of obesity.

Soda taxes in the United States
Obesity in the United States is a public concern with the percentage of overweight people being among the highest in the world. Soda consumption has been noted as a contributing factor to the obesity epidemic and medical costs related to obesity are about $147 billion a year. In 1994 the soda tax idea was introduced by Kelly D. Brownell, Director of the Rudd Center for Food Policy and Obesity at Yale. In 2009, 33 US states had a sales tax on soft drinks. France is to introduce a tax of soft drinks in 2012.
To counter the problem of children's easy access to soft drinks, in 2005 the American Beverage Association began working to remove soft drink machines from US primary schools (children aged six to fourteen), and to replace soft drinks with healthier beverages such as orange juice or milk. High schools would have a 50/50 balance of machines dispensing soft drinks and healthier alternatives. Although orange juice may have a few more calories than cola, it also has other nutrients and fibre.
In 2009 the American Heart Association reported that the soft drinks and sugar sweetened beverages are the largest contributor of added sugars in Americans' diets. Added sugars are sugars and syrups added to foods during processing or preparation and sugars and syrups added at the table. Excessive intake of added sugars, as opposed to naturally occurring sugars, is implicated in the rise in obesity, and the AHA adds that no more than half of a person's daily discretionary calorie allowance should come from added sugars.

New York
In the case of New York's effort to introduce a tax, the positive health message was supported by groups like the New York Academy of Medicine and editorial writers. The Alliance for a Healthier New York was formed with financial and strategic support from the United Healthcare Workers East union and the Greater New York Hospital Association. Groups such as New Yorkers Against Unfair Taxes, set up by beverage companies, grocers, teamsters who represent drivers and production workers and others, lobbied against the measure. The anti-tax forces argued that the tax was based on dubious science, because obesity was a matter of how many calories people consumed, not where those calories came from.
The idea that the soda tax would cut into the income of poor New Yorkers while doing nothing to improve their access to exercise or fresh, affordable, healthy food was echoed by some advocacy groups for the poor. For example, Triada Stampas, the director of government relations for the Food Bank of New York City, testified against the tax before a Senate committee.

Generalized sugar tax
Norway has an excise on refined sugar products, including soft drinks, set to 7.05 kroner per kilogram.

Internet information
On January 18, 2013, the ABC's opinion site, The Drum, published a comment by associate Professor John Fitzgerald, a public health expert at the University of Melbourne.
Professor Fitzgerald compares the Australian situation with that in the United States and argues that if Australia attempts to tax soft drinks the soft drink industry can be expected to mount a vigorous opposition.
The full text of this opinion piece can be found at http://www.abc.net.au/unleashed/4471222.html

On January 17, 2013, the Cancer Council, Diabetes Australia and the National Heart Foundation issued a media release titled 'Time to Rethink Sugary Drinks'.
The media release makes a series of recommendations aimed at reducing Australia's sugar consumption. Included in these are investigating placing a tax on soft drinks and placing restrictions on the sale and promotion of soft drinks to children.
The full text of the media release can be found at http://www.diabetesaustralia.com.au/Documents/DA/What%27s%20New/Sugary%20Drinks%20Media%20Release.pdf

In 2009, the New South Wales Centre for Public Health Nutrition released a review titled 'Soft drinks, weight status and health: a review' which gave a detailed overview of trends in soft drink consumption and associated health risks.
The full text of this document can be found at http://www0.health.nsw.gov.au/pubs/2009/pdf/soft_drinks_report.pdf

On August 31, 2009, The New York City Department of Health and Mental Hygiene issued a media release announcing its program to increase New Yorker's awareness of their soda-based sugar consumption. The campaign asks the question 'Are your pouring on the pounds?'
The full text of this media release can be accessed at http://www.nyc.gov/html/doh/html/pr2009/pr057-09.shtml

Arguments against placing a tax on soft drinks and other sweetened beverages
1. It is the total calorie intake that contributes to overweight and obesity
It has been claimed that focusing on just one component of the diet popularly consumed by Australians is misguided.
According to this argument, overweight and obesity are the products of the total number of calories regularly consumed and the nature of dietary choices made. Thus, it is claimed, it is inappropriate to focus on one element of a diet in the mistaken belief that this will overcome the problem.
Geoff Parker, the chief executive of the Australian Beverages Council, has stated, 'No one food or beverage causes obesity and this is why we think this particular campaign is somewhat misguided.'
Mr Parker went on to claim, 'Focusing on a single source of kilojoules in the diet hasn't worked in the past and ignores the concept of the total diet...
No one food or beverage causes overweight or obesity. Consuming more kilojoules than what is burnt through physical activity is what leads to weight gain.'
Expanding on this point, Mr Parker has further claimed, 'All kilojoules count regardless of the source. The industry produces a range of hydration options to suit everybody's lifestyle and all beverages can be consumed in moderation as part of a balanced diet supported by regular physical activity.'
In 2006, the former chief executive of the Australian Beverages Council, Tony Gentile, also stated, 'For everybody, consuming a variety of foods and beverages in moderation is the key to health and weight control. Ultimately, there is no bad food - just bad habits.'
The same point was made in the American context by Sandy Douglas, president of Coca-Cola, North America. Ms Douglas has stated, 'No one single food or beverage is responsible for obesity. While the volume of regular-calorie soft drinks sold declined 10 per cent from 2000 to 2008, according to industry publication Beverage Digest, obesity trends increased during that same period, according to the Centers for Disease Control and Prevention.'

2. Other commonly consumed drinks and snack foods contribute to overweight and obesity
It has been claimed that to place a tax only on soft drinks when so many other foods and beverages commonly consumed by Australians play a part in overweight and obesity would be discriminatory.
Geoff Parker, the chief executive of the Australian Beverages Council, has stated, 'We're not anti-tax but we're against discriminatory taxes.'
A similar point has been made by Jeff Rogut, the executive director of the Australasian Association of Convenience, has stated, 'Applying tax to certain items because those items have an emotional association to obesity in the minds of some groups is not only flawed, it's short-sighted and lazy.'
The same point has also been made in the United States. Dr. Michael J. Rinaldi of the Sanger Heart and Vascular Institute has questioned the fairness of singling out soft drink (referred to in The United States as 'soda') for punitive taxes.
Dr Rinaldi asked, 'If soda is taxed, should this tax also be applied to all "fast food", confections, or portion size? Why limit it to food? Should we not tax all behaviours linked to health care expenditures? Why not deter gun and motorcycle ownership or sedentary lifestyle through taxation?'
It has further been claimed that if there is a reduction in the consumption of soft drinks and other sweetened beverages, depending on the nature of the tax, consumers may simply increase their consumption of fruit juices and flavoured milks, both of which have high sugar contents.
It has also been noted that a tax on soft drinks and other sweetened beverages would not affect people's consumption of fast foods in all its many forms which have been significantly implicated in studies of the causes of overweight and obesity.

3. Soft drinks can form a valuable contribution to an adolescent's diet
It has been claimed that the sugar content of soft drinks means that when consumed in moderation they can be a source of immediate energy for young people.
The Australian Beverages Council, which represents soft drink makers, has stated, 'Let's not forget as well, these drinks do contain energy and that's exactly what kids need to run around, particularly in high schools.'
Referring to a somewhat older age group, Geoff Parker, the chief executive of the Australian Beverages Council, has also claimed, 'It's no surprise that young adult males are the people that consume full-sugar varieties the most. They are the young tradies, the apprentices, out there with physically active lifestyles. No one food or drink causes obesity.'
The Australian Beverages Council has further claimed that it has developed its range to increase the number of diet or no sugar options available so that those who wish to further control their sugar intake can do so.
In a media release issued in December, 2007, the Australia Beverages Council stated, 'The industry has increased the number of new beverage options with low or no-calorie content and light versions of existing beverages. We've also increased the choice and availability of individual packaging sizes, and labelling initiatives to help Australians make an informed choice.'
The Council has further stated, 'There is a non-alcoholic beverage to suit every dietary need and every social occasion including bottled waters, electrolyte drinks, vitaminised waters, carbonates both with sugar and with zero sugar, iced teas and coffees, fruit juices and fruit juice drinks, energy drinks etc.'
Summarising its position, the Australian Beverages Council has stated, 'Different people need to select different beverage types to meet individual health, taste and hydration needs and preferences.'

4. Soft drinks are no longer targeted for sale to primary school children
In 2006 Australian Beverages Council members voluntarily adopted a policy not to market sugar-sweetened carbonated beverages to primary schools.
Australia Beverages Council members also claim they do not advertise these beverages in "C" time on television or in television programs where a majority of primary school age children are viewers.
In addition, the Australian Beverages Council has said its members are committed to not engaging in any direct commercial activities in primary schools and to withdrawing sugar-sweetened beverages from secondary schools where required.
In August 2006, Tasmanian Senator Guy Barnett congratulated the Australian Beverages Council for its decision to withdraw sugary soft drinks from primary schools.
Senator Barnett had worked with the industry for more than two years on this issue. On August 29, 2006, the Australian Beverages Council Ltd announced that sugar sweetened carbonated soft drinks will not be provided to primary schools and will not be directly marketed to primary school age children except for special events such as sports days and school fetes at the school's request.
The Australian Beverages Council said that over the next two years it would phase in a voluntarily withdrawal of soft drinks containing sugar from all primary schools and only provide them to high schools on request.
The then chief executive of the Australian Beverages Council, Tony Gentile claimed in relation to sponsorship by soft drink manufacturers, 'People want us to sponsor activities which assist children to exercise. If we did not, the losers would be the children.'
The Australian Beverages Council states that all its members abide by the requirements of the Australian Consumer and Competition Commission (ACCC) and the Food Standards Code. In addition, the Australian Beverages Council has adopted as policy the Australian Association of National Advertisers (AANA) voluntary guidelines for Advertising Directed at Children and is a signatory to the Code of Practice on Nutrient Claims and to all other voluntary advertising industry codes of practice.

5. The best means of combating overweight and obesity is public education
The Australian Beverages Council has indicated its belief that education is the best means of ensuring that people eat and drink appropriately and maintain a healthy weight.
On its Internet site the Australian Beverage Council has stated, 'The Beverage Industry is committed to promoting nutrition education and physical activity, especially with schools and local communities.'
On its Internet site the Australian Beverages Council further states, 'The Council believes that consumer nutritional concerns caused by misinformation about the range of the products offered need to be corrected by ensuring that accurate information about the nutritional value and impact of various beverages are made available to consumers.'
The Council believes that the Healthy Eating Guidelines developed by the Australian Government's Health Department should be widely distributed and promoted. The Council includes these Guidelines on its Internet site.
It cites the guidelines noting 'To eat a healthy diet it is important to eat a variety of foods everyday from each of the following food groups: bread, cereals, rice, pasta, noodles; vegetables, legumes; fruit; milk, yogurt, cheese; meat, fish, poultry, eggs, nuts, legumes.'
Supporters of soft drink consumption argue that unless consumers are aware of the importance of balanced nutrition and make appropriate consumption choices, it would not matter if soft drinks and related beverages were taxed. The issue is not what people eat, but how much of each component of their diet they consumer.
The Union of European Soft Drink Associations has stated, 'If governments wish to improve the health of populations they need to take a holistic approach and work with public health authorities, schools, employers, civil society and other stakeholders to change attitudes and behaviour.'
The Union further noted, 'Experts from the World Health Organisation to the European Commission acknowledge that rising obesity levels are due to a range of factors. Modern lifestyles expend less energy than those of our counterparts in the 1970s - more cars, less walking, labour saving household appliances, more sedentary employment, more sedentary leisure time... There are no bad foods as humans need a balance of nutrients to stay healthy ... However, there are bad diets where certain nutrients are over-consumed and others eaten in insufficient quantities.'
In summary, the Union argues, 'Education in optimal nutrition is the key to ensure that people know how to feed themselves and their families.'

Arguments in favour of placing a tax on soft drinks and other sweetened beverages
1. Obesity and overweight, including among children and adolescents, is a growing health risk in Australia
Figures supplied by Monash University's Department of Medicine, Nursing and Health Sciences indicate that Australia is currently ranked as one of the fattest nations in the developed world. The prevalence of obesity in Australia has more than doubled in the past 20 years.
Fourteen million Australians are overweight or obese. If national weight gain continues at current levels, by 2025, 80% of all Australian adults and a third of all children will be overweight or obese.
Obesity has overtaken smoking as the leading cause of premature death and illness in Australia. Obesity has become the single biggest threat to public health in Australia.
On the basis of present trends it is predicted that by the time Australia's children and adolescents reach the age of 20 they will have a shorter life expectancy than earlier generations simply because of obesity.
Some of the diseases associated with obesity include diabetes, stroke and vascular disease, high blood pressure, asthma, sleep apnoea, cardiovascular disease and kidney disease.

2. Soft drinks and other sweetened beverages are key contributors to obesity and ill-health
It has been claimed that these beverages are key contributors to obesity and ill-health in Australia for a number of reasons.
Firstly, soft drinks and other sweetened beverages are very popular and widely-consumed. Sugar-sweetened carbonated beverages, or soft drinks, are the most popular water-based beverages in Australia. International market research data indicates Australia is ranked among the top 10 countries for per capita consumption of soft drinks.
Secondly, these drinks are very high in sugar content, which should be consumed only occasionally. One 600ml soft drink contains on average 16 teaspoons of sugar and a daily dose is estimated to lead to a 6.75kg weight gain each year. One 375ml can contains ten teaspoons of sugar and 640 kJ (150 cal). These drinks provide no other nutritional value other than fluid, that is, their calorie load is made up of so-called 'empty' calories. This means that though these drinks are relatively high in calories, they have no nutrients such as protein, vitamins or minerals.
Craig Sinclair, chairman of the public health committee at Cancer Council Australia, has claimed, 'You are really just getting a vehicle for the delivery of sugar without any nutritional benefit whatsoever.'
These drinks are identified as an 'extra' food in The Australian Guide to Healthy Eating, that is, a food that should be consumed only 'occasionally' and 'in small amounts'. 'Occasionally' has been defined as 'once a week or less' by The Communication on Obesity Action for Child Health.
Thirdly, a number of studies have directly linked markers of ill-health among children with their consumption of soft drinks. Initial signs of heart disease have been observed in children as young as 12 who have a high intake of sugary drinks. Narrowed blood vessels inside the eye are a known precursor to cardiovascular disease in adults. In 2012, nearly 2000 12-year-olds had retinal images taken at the Centre for Vision Research at Sydney University. Narrowing of the retinal arteries was seen in those children with an intake of more than 274 grams of carbohydrates a day. A major source of those carbohydrates came from soft drinks or cordial.
In addition, high consumption of soft drinks and other sugary drinks are associated with a number of other health problems, including type 2 diabetes, osteoporosis and dental caries.

3. The consumption of soft drinks and other sweetened beverages is excessive and increasing
Australians consume an excessive amount of soft drink and other sweetened beverages and the amount being consumed has grown greater.
Per-capita consumption of carbonated and aerated beverages, including sugar-sweetened and artificially sweetened or 'diet' drinks, in 1998-99 was 113.0 litres annually. This equated to an increase of 240 per cent over the preceding 30 years.
The soft drink industry reported that the average per capita consumption of soft drinks in 2003 was 110 litres. This amount equates to approximately 300 ml of soft drink (regular and diet) consumed per person, per day. The small decline in per capita consumption of soft drinks between 1999 and 2003 has been attributed to a growth in consumption of artificially sweetened (diet) soft drinks.
Apart from diet soft drinks, other growth areas in water-based beverages in Australia include sports drinks, drink mixers (used with alcoholic drinks) and energy drinks. These are also sugar-sweetened.
Studies have shown that the consumption of all sugar-sweetened drinks by children increases with age. Most of this increase was due to soft drink consumption, with similar intakes of cordials, fruit juices and fruit drinks across age groups.
For children of all ages (2-18 years), the largest contributor to sugar-sweetened drinks consumption was soft drinks, followed by cordials, fruit juice, fruit drinks and sports drinks.
Similarly for adults, the largest contributor to sugar-sweetened drinks was soft drinks, followed by fruit juice, fruit drinks, cordials and sports drinks.
A study of food intake in toddlers in Western Sydney as part of the Childhood Asthma Prevention Study (CAPS) found that sugary beverages (excluding fruit juice) contributed substantially to energy and carbohydrate intakes. On average, soft drinks were consumed on alternate days by 29 per cent of the children aged 16-24 months.
Adolescents, particularly males, consume the most soft drink, with per-consumer consumption in these groups reaching almost a litre per day. Soft drinks contribute up to 10% of energy intake in adolescents.
Figures such as these indicate that soft drinks and other sweetened beverages are being consumed too regularly and in too large quantities. Such drinks are contributing a disproportionate amount to the average Australian's calorie load and this is a problem found even among very young children.

4. Soft drinks and other sweetened beverages are vigorously promoted to children and adolescents
It has been claimed that one of the reasons for taxing soft drinks and thus increasing their price is to counter the effect of extensive advertising of soft drinks and other sweetened beverages,
Soft drink companies use a wide variety of marketing techniques to increase sales. These techniques include easy accessibility in a wide variety of venues; heavy media advertising; sponsorships of concerts and professional organisations; targeting of schools, for example, through vending machines; tie-ins with movies and music groups and merchandise.
Soft drink manufacturers in Australia have recently introduced polices which state their intention not to market their products directly to young children. However, indirect marketing (for example, through product placement, marketing through websites and promotions, and exposure to marketing directed at older children and adults) may undermine the effectiveness of these policies.
Television is a medium through which children are commonly exposed to food marketing. Two studies conducted in 2007, indicated that food marketers advertise heavily during children's programming in Australia. While studies conducted in 1994 and 2004 showed that soft drink is consistently featured near the top of the list of advertised food items in different countries, including Australia.
A 2006 study of children aged 5-6 years and 10-12 years in Melbourne showed that children who watched TV for more than two hours per day were 2.3 times more likely to consume one serve or more per day of high-energy drinks than children who watched less television.
Craig Sinclair, chairman of the public health committee at Cancer Council Australia, has claimed, there is 'something inherently not right' in having Coca-Cola and Powerade sponsor events like school rugby and junior soccer, and it is only a matter of time before tobacco-style bans on direct marketing to children are introduced for unhealthy food.

5. Cost is a significant factor in determining the consumption of soft drinks and sweetened beverages
A number of studies have shown that nutrient-poor, sweetened beverages are relatively cheaper than higher quality drinks and foodstuffs. It is claimed that this relatively lower price encourages their consumption, especially among children and the economically disadvantaged.
A study conducted in 2007 concluded that the obesity-promoting capacity of different beverages is linked not so much to their sugar content but their low price. That is, soft drinks and other sweetened beverages will be consumed in greater quantities and thus contribute to higher levels of overweight and obesity because they are cheaper and thus more readily affordable.
A British study conducted in 2006 concluded that cost was an important determinant of carbonated soft drink consumption, as opposed to fruit juice and still fruit drinks, in children aged 13-14 years.
It has further been suggested that the revenues generated through taxing soft drinks and other sweetened beverages could be used to help fund education programs and advertising campaigns designed to make all consumers, including children, aware of the health dangers associated with excessive consumption of these drinks.
It has also been noted that increasing the cost of other hazardous products through taxation has succeeded in reducing consumption.
On January 18, 2013, the ABC opinion site, The Drum, published an opinion piece by John Fitzgerald. Dr Fitzgerald is an Associate Professor in public health at the University of Melbourne. Dr Fitzgerald has stated, 'Taxation has also been used to curb alcohol use. From 1992-97, the Northern Territory introduced a small levy on drinks of greater than 3 per cent alcohol content. The levy and the Living With Alcohol program it was used to fund reduced alcohol-attributable deaths (as well as Indigenous deaths). More recently, the Federal Government selectively increased tax on alcopops with a notable impact on subsequent consumption.'

Further implications
The Australian government has indicated that it has no interest in placing a tax on soft drinks and other sweetened beverages. This is likely to prove a short-term decision.
In 2006, the current leader of the Opposition, Tony Abbott, publicly identified the consumption of soft drinks as a primary cause of Australia's obesity problem. Should Mr Abbott become Australia's next prime minister, it will be interesting to see if he and his government support the imposition of a tax on soft drinks.
The question is more complex than it might at first appear. Although the consumption of soft drinks has been linked to obesity and its associated health problems, there is no assurance that a tax on soft drinks would resolve this problem. There is already a growing trend in Australia toward the consumption of artificially sweetened diet drinks. A number of studies have indicated that these drinks also come with health risks and may not represent a safe alternative to sugar-sweetened drinks. If a tax on soft drinks and sugar-sweetened beverages were to increase the consumption of artificially sweetened products this may have no positive health effect.
The claims of the Australian Beverages Council that there are many other factors that prompt obesity are obviously true. Were the Australian government to take a pro-active approach to the prevention of weight-related diseases it would also need to consider how it could best discourage the consumption of all fast foods.
Any strategy designed to alter the eating and drinking habits of Australians would need a combination of education and taxation. The Cancer Council, Diabetes Australia and the National Heart Foundation of Australia are beginning their own advertising and education campaign titled 'Time to Rethink Sugary Drinks'. The government should take an active part in the support of such campaigns via taxation in the same way as it has in addressing the health risks associated with smoking and some aspects of alcohol consumption.
The soft drink industry is made up of subsidiaries of very powerful multinational companies, while the largest players in the fast food industry are similarly powerful and multinational. It may be that in an election year the government does not wish to take on such substantial adversaries; however, it seems likely that in years to come Australia's governments, of whatever political persuasion, will need to do more to address Australian's eating and drinking habits in the name of overcoming the associated health problems.

Newspaper items used in the compilation of this issue outlinePLEASE NOTE: the newspaper items for this ussue outline are presented as links to the online versions only. We apologise for this. The Christmas break indexing, which is not as comprehensive as for the rest of the year, did not cover the printed-edition items.